Are we subsidizing over-fishing?

According to this article from Reuters, yes.

Here's a link to a similar story from a couple of years ago.

Why do nations continue to subsidize fishing, when the evidence is overwhelmingly clear that such subsidies make the situation worse?

What are some examples of these subsidies?

Solution?

We will not formally cover fisheries econ until later in the term, but one of the things we'll learn is that the best economic solution is also the solution that's best for the fish (i.e. truly sustainable use). We'll also learn that command-and-control (standards) simply will not get us there.

Stavins on Cap & Trade

Robert Stavins of Harvard University has an excellent blog post on the merits of market-based solutions to environmental problems. His essay is full of useful links and information. Everyone should give this a careful read.

Hat tip: env-econ

Where I'll be this week

I'm traveling to University of Exeter, UK to participate in a meeting regarding a multinational project titled "The Future of Reefs in a Changing Environment".

The working group that I'm involved with is livelihoods and coral reefs. PhD student David Gill (with Prof. Hazel Oxenford and yours truly) will be conducting economic valuation research regarding extractive and non-extractive values of reef fish in the Caribbean.

How might understanding the relative values of extractive uses (fishing) and non-extractive uses (snorkeling and diving) be useful to inform policy?

Biodiversity as a global public good

The following excerpt is from an article recently published in the journal Science (one of the most widely read and prestigious science journals in the world). The numbers in parentheses are citations from the article. I can list those for you if you're interested.

Citation: "Biodiversity Conservation: Challenges Beyond 2010", Michael R. Rands et al., Science, 329, 1298, 2010.

"To address the continued global loss of biodiversity, we propose the pursuit of three interconnecting priorities: (i) to manage biodiversity as a public good, (ii) to integrate biodiversity into public and private decision-making, and (iii) to create enabling conditions for policy implementation."

"Managing biodiversity as a public good. An appreciation of biodiversity as a public good (65)
and of its economic value (66) is, we believe, central to future effective conservation. Biodiversity loss is rarely the intended consequence of human actions; more often it is an unintended side effect of decisions taken for other reasons—an economic “externality” (67). Biodiversity is a special kind of externality, as the impacts of a particular action are often distant in space and time (e.g., local rainforest loss may affect the global carbon cycle, with consequences for future generations). This makes effective regulation difficult, as no single body has jurisdiction over the world’s biodiversity. It also makes transaction based
solutions difficult, because those who damage biodiversity are often widely separated, in
space or time, from those who experience the consequences. Actors have few incentives or opportunities to change their behavior, whether they are small holder households planning their annual agricultural cycles or large multinational companies determining their corporate priorities. Thus, understanding and managing biodiversity as a global public good,which must be provided through conscious collective choices (68), is fundamental to achieving its conservation (5). "

"The recognition of biodiversity as a public good is not a new concept, and in recent years
economists have made substantial progress in developing valuation techniques that quantify the local and global benefits of biodiversity (69). Measuring the economic values of biodiversity (5) and estimating spatially explicit economic values of services across landscapes to inform management decisions (70) are vital. However, making these values explicit is insufficient to bring about a change in behavior, unless supporting public policies are in place that either reward positive individual actions or penalize harm. Economists need to work more closely with conservationists and policy makers to develop intervention strategies
that shift individual actors toward more biodiversity-friendly behavior, using regulatory
devices as well as incentives, thereby securing the provision of biodiversity conservation as a
global public good. "

"Integrating biodiversity into public and private decision-making. The value of biodiversity
must be made an integral element of social, economic, and political decision-making, as is starting to happen with carbon and climate change. Government, businesses, and civil society
all have crucial roles in this transition. For government, maintenance of stocks of natural capital must become an explicit, accountable, and implemented element of policy. Concern
for biodiversity cannot be restricted to a nation’s environment ministry but must extend
across all sectors of government, such as treasury, industry, and defense. Policy change will require clear and cost-effective metrics of natural capital consumption and depletion (71) and the development of systems of public accounts that include both sustainability (72) and the specific issue of biodiversity loss (5). Government staff and politicians may need in-service training in biodiversity science and ecological economics, with effective research support. Research investment will need to focus on applied transdisciplinary problems. Government will need to remove perverse subsidies detrimental to biodiversity, such as in agriculture, forestry, and fisheries. Fishing subsidies encourage overexploitation of two-thirds of fish stocks across the globe, threatening both the fishing industry (worth $80 billion to $100 billion per year) and the 27 million people dependent on it (5, 73). Government policy needs to integrate biodiversity conservation, poverty alleviation, and the demands of a sustainable
economy (74) to meet the Millennium Development Goals (75)."

There's a lot of stuff here related to our class. Personally I was really excited to this in Science, as these are messages that colleagues and I have been trying to deliver for a long time.

Anyone care to attempt a summary sentence or two?

Lots of small MPAs better than one big one?

From Rueters: A new UN study suggests that a network of small marine protected areas may be more effective than few big MPAs.

First, what is the basic economic problem here? That is, why do we need MPAs in the first place?

What type of solution (command-and-control or incentives) would we classify marine protected areas as?

What problems arise with MPAs?

What are the goals of an MPA? Are most MPAs reaching those goals?

Read about MPA effectiveness here and here.

Here is an excellent article from Resources for the Future on the economic and social implications of MPAs.

Here is an informative site from NOAA regarding economics and MPAs.

Welcome CERMES students

Starting this week 17 graduate students at the Center for Resource Management and Environmental Studies (CERMES) University of the West Indies-Cave Hill will be joining our blog.

These students hail from 8 different countries (Barbados, Guyana, Jamaica, Nigeria, St. Lucia, Suriname, Trinidad & Tobago and the U.S.). Welcome to the blog!

CERMES students - we started class here about 2 weeks ago, so you'll see some blog posts and comments. Feel free to join those conversations if you find them of interest.

Some blog topics will be US-centric, some will pertain to the Caribbean and some will be international in scope ... I do hope that everyone contributes to the discussion regardless of the context.

standards

Today in class I mentioned ambient air quality standards under the Clean Air Act.
Click here to view the standards.
Basic CAA info here.

We also talked about CAFE standards.
Read about those here and here.

Here's a simple example illustrating the Coase Theorem (published in 1960 by the way) from Thayer Watkins at San Jose State.

More on Coase here and an interesting discussion at Freakonomics from '07.